According to a report from the Wall Street Journal,"Beijing-based Sina Corp.runs the country's most popular public microblogging service, the Twitter-like Sina Weibo, which for the past three years has served as the closest thing China has for a national forum. It is facing increasing pressure from Tencent Holdings Ltd.'s WeChat, a mobile app similar to WhatsApp and Line that allows users to post status updates, share photos and even strike up quick romantic encounters".
"When Sina reports its third-quarter financial results after the market closes on Tuesday in New York, investors will watch closely for indications that Weibo is losing eyeballs to WeChat. Last quarter, concerns about a potential decline in use were allayed when Sina executives reported that time spent on the Weibo mobile application went up 15% from the previous quarter, with daily active users growing 8.3% to 54 million".
But Sina faces another challenge, this time from the government. Beijing in recent months has put pressure on some widely followed Weibo users for the sake of—in the words of one official—"the purification of the online environment."
On the positive side, Sina could get a boost from an agreement it struck earlier this year with Chinese e-commerce company Alibaba Group Holding Ltd., which took a stake in Weibo and formed a partnership that the companies have said will generate $380 million in advertising revenue for Sina over the next three years. Even so, investors will be watching to see whether piping in new services, like games, will help it become more profitable.
"Sina is expected to post profit of 32 cents a share, up from 17 cents a share a year earlier", according to analysts surveyed by Thomson Reuters.
"There is less anxiety over Tencent's WeChat, which as of August boasted 236 million monthly active users. Tencent will post third-quarter earnings on Wednesday in Hong Kong. Because of its less-public nature, WeChat has also skirted most of the attention of authorities, who worry more about Weibo's ability to make complaints about corruption or pollution go viral—though authorities still censor the service and use it to track dissidents. More encouraging, several new mobile games on WeChat have strong download figures, helping Tencent's case that it can eventually make money from virtual products and games fees through the app".
"But over the past two weeks Tencent's stock has fallen, in part because of concerns about competition from a new entrant into the messaging world: Alibaba.
Alibaba is running a promotion through which it will pay for mobile data consumed by users on its applications. Alibaba founder Jack Ma issued a letter to the company's more than 20,000 employees saying they won't get bonuses if they don't add 100 friends on Laiwang. Alibaba is also running a new campaign that opens the profiles of more than 30,000 young female models who it says will chat with users".
